Early fraud warning

Issuers must report confirmed or suspected fraud to the card networks: Visa through TC40 reports, Mastercard through its System to Avoid Fraud Effectively (SAFE). Processors such as Stripe pass these reports on to merchants as early fraud warnings. A warning is not a dispute: no money moves and no response is required.

Many warnings are later followed by a dispute, so they give the merchant a chance to act first. Stripe’s documentation suggests a merchant may refund a charge that received a warning to avoid a dispute later. A refund does not erase the fraud report itself: Visa’s monitoring program counts it either way.

For subscriptions, a warning on an active customer is also a signal to stop future renewals on that card until the customer confirms. Whether to refund depends on the amount, the account’s history and the cost of a dispute.